Clear Channel Outdoor Holdings (CCO)

Relationship with Clear Channel Communications and CC Media Holdings, Inc.

Clear Channel Communications completed the merger with a group of equity funds sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. on July 30, 2008. Clear Channel Communications, our parent company, is now owned indirectly by CC Media Holdings, Inc. There are several agreements which govern our relationship with Clear Channel Communications including the Corporate Services Agreement, Employee Matters Agreement and Tax Matters Agreement. Clear Channel Communications has the right to terminate these agreements in various circumstances. As of the date of the filing of this report, no notice of termination of any of these agreements has been received from Clear Channel Communications. Our agreements with Clear Channel Communications will continue under the same terms and conditions subsequent to the merger.

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As a result of the merger, Clear Channel Communications’ $1.75 billion revolving credit facility, including the $150.0 million sub-limit, was terminated. The facility was replaced with a $2.0 billion six year revolving credit facility, which includes a $150.0 million sub-limit that certain of our International subsidiaries may borrow against to the extent Clear Channel Communications has not already borrowed against this capacity and is in compliance with its covenants under the credit facility.

CC Media Holdings, Inc. and Clear Channel Communications will account for their merger as a purchase business combination in conformity with Statement of Financial Accounting Standards No. 141, Business Combinations, and Emerging Issues Task Force Issue 88-16, Basis in Leveraged Buyout Transactions. Purchase accounting adjustments, including goodwill, will be pushed down to our financial statements. Clear Channel Communications is currently in the process of obtaining third-party valuations of certain of the assets and liabilities in order to allocate the purchase price. Clear Channel Communications will complete its purchase price allocation within one year of the closing of the acquisition.

Under the Corporate Services Agreement, Clear Channel Communications allocates to us our share of costs for services provided on our behalf based on actual direct costs incurred by Clear Channel Communications or an estimate of Clear Channel Communications’ expenses incurred on our behalf. For further discussion of these services, see Note 5 of the Notes to the Consolidated Financial Statements. For the three months ended June 30, 2008 and 2007, we recorded approximately $5.6 million and $5.5 million, respectively, as a component of corporate expenses for these services. For the six months ended June 30, 2008 and 2007, we recorded approximately $12.1 million and $11.4 million, respectively, as a component of corporate expenses for these services.